Friday, July 06, 2007

XBOX 360: Microsoft finally agrees - it sucks balls.

Microsoft has allocated over one billion dollars to extend all XBOX 360's warranties by 3 years, because so many of the machines are going bad.

The glitches, and the bad publicity, could weigh the company down as it claws for market share in the highly competitive console market. In May, the Xbox 360 ranked No. 2 in unit sales behind Nintendo's Wii, but still beat out Sony's Playstation 3, according to data from NPD Group.

Recall the failure rate of these things?

Bach said the company made some manufacturing and production changes that he expects will reduce Xbox 360 hardware lockups, but he declined to identify the problems or say which others might remain. Microsoft said it will record a charge of up to $1.15 billion for its fourth fiscal quarter, which ended June 30, to cover the additional costs associated with the warranty extension.

I'd love to know what gamers can expect to go wrong...

Matt Rosoff, an analyst at the independent research group Directions on Microsoft, estimates that Microsoft's entertainment and devices division has lost more than $6 billion since 2002.

Microsoft has written down larger amounts in the past - more than $10 billion in the late 1990s related to investments in telecommunications companies, and more than $5 billion related to antitrust issues - but a $1 billion write-down for one division in one quarter is significant.

"It suggests the problem is pretty widespread," Rosoff said.

I'm sure Microsoft is making this public before E3 so that it can focus on other news during E3, just as when Nintendo revealed that Project Revolution's name was the Penis, I mean the Wii. Honestly I've gotten used to that name - you can't make penis jokes when your 2 year-old says "Wii?" But I digress.

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